ACUAR v. LETOURNEAU

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ACUAR

v.

LETOURNEAU

June 9, 2000

Record No. 992228

FIDELINA D. ACUAR

v.

KEVIN LETOURNEAU

FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH

H. Thomas Padrick, Jr., Judge

Present: All the Justices

OPINION BY JUSTICE CYNTHIA D. KINSER

This appeal arises out of a motor vehicle accident that
occurred in December 1995 in the City of Virginia Beach. Kevin
Letourneau filed a motion for judgment against Fidelina D. Acuar
seeking damages for injuries he allegedly sustained as a result
of that accident. Acuar admitted liability, and the case
proceeded to trial solely on the issue of damages. A jury
returned a verdict in favor of Letourneau and awarded him damages
in the amount of $150,000. The circuit court entered judgment in
accordance with the jury verdict.

We awarded Acuar this appeal on two assignments of error: (1)
that the circuit court erred in allowing repeated references to a
police accident report in violation of Code ? 46.2-379, and
(2) that the circuit court erred in allowing those portions of
Letourneaus medical expenses that were "written
off" by his health care providers to be submitted to the
jury. Because we conclude that the court erred in permitting
numerous references to the accident report, we will reverse the
circuit courts judgment and remand for a new trial.
Furthermore, since the second issue will arise again during a new
trial on remand, we also decide that issue and conclude
Letourneau may present evidence at the new trial of the full
amount of his reasonable medical expenses without any reduction
for the amounts "written off" by his health care
providers.

FACTS

The facts pertinent to these issues are not in dispute. On the
morning of trial, Acuar made a motion to exclude the amounts of
Letourneaus medical bills that were "written off"[1]by his health care providers.[2]Although the court expressed
the view that those portions written off should not be introduced
into evidence, the court denied Acuars motion on the basis
that it was in the nature of a motion in limine and that, as
such, it was not timely made under the courts scheduling
order.[3]

During the trial, Albert L. Mills, the police officer who
investigated the motor vehicle accident in question, testified.
During direct examination, counsel for Letourneau asked Mills if
he needed to refresh his memory with regard to the type of one of
the vehicles involved in the accident. In response, Mills stated,
"Yes. I dont have a copy of the accident report."
At that point, while handing the accident report to Mills,
Letourneaus counsel advised the court that Mills "may
need to refer to this. This is his accident report."

Acuars counsel then requested a bench conference, after
which the following colloquy took place:

BY [LETOURNEAUS COUNSEL]:

Q Officer Mills, does what I just handed you refresh your
recollection?

A Yes, sir. Thats a copy of the accident report which I
filled out during that time frame.

Q Okay.

[ACUARS COUNSEL]: Ive objected.

THE COURT: Officer, just look directly at the report and
respond to the question.

Acuar then objected to the manner in which the document was
being utilized to refresh the officers memory. The trial
court overruled the objection on the basis that the document was
only being used to refresh Mills recollection.

Later in the direct examination of Mills, Letourneaus
counsel asked the officer to mark on a photograph the location of
Letourneaus vehicle at the accident scene. In response
Mills stated, "I dont particularly remember exactly
where the vehicle was in that intersection. All I can do is
recollect what the diagram shows on my accident report."
Mills reference to his accident report again drew an
objection from Acuars counsel.

On re-direct, Letourneaus counsel asked Mills,
"Officer, when you testified that the  how the truck
ended up, was that going by your memory?" Mills answered in
the affirmative, and counsel then asked, "Look at your
diagram again and tell me whether or not ."
Acuars counsel objected again and stated that the problem
of referring to the accident report was being compounded. The
court then directed the officer to check his notes and refresh
his recollection.

Acuars counsel also objected when a diagram was
mentioned in the following colloquy between Letourneaus
counsel and Mills:

Q Did you look at the skid marks in the street?

A I did look at the scene. I dont have anything
indicated about skid marks, although the diagram I have indicated
that 

[ACUARS COUNSEL]: Judge, theres where I have an
objection as to 

THE COURT: Do you have any independent recollection or in
looking at your notes to indicate if at any time any vehicle
spun?

THE WITNESS: Yes, sir, the diagram that I have drawn based on
the accident scene during that time frame shows that the vehicle
did turn slightly after impact.

At a recess during trial, Acuars counsel argued that
"the words accident report are not supposed to
be used in front of the jury," and moved for a mistrial
because of the numerous references to the report. The circuit
court denied the motion, although it indicated that it might give
the jury a cautionary instruction.

On the second day of the trial after reviewing relevant cases,
the court acknowledged that Acuars objections to the use of
the term "accident report" should have been sustained,
but the court had not yet decided what action to take with regard
to the admission of that testimony. On the third and final day of
trial, the court announced that it was not going to change its
earlier ruling with respect to the references to the accident
report, and was allowing the testimony to remain in evidence. The
court also declined to give a curative instruction, believing
that "it [would] create more problems than it would
resolve."

Since Acuar admitted liability, Mills testimony focused
on the force of the impact between the two vehicles and their
relative positions after the collision occurred. Donald Stanley,
a deputy sheriff with the City of Virginia Beach Sheriffs
Office, also testified with regard to the same issues, without
referring to the accident report. Stanley was driving to work,
travelling directly behind Letourneaus truck at the time of
the collision. Stanley witnessed the accident and saw
Acuars vehicle collide broadside with Letourneaus
truck, causing the truck to spin around 180 degrees, go up and
over the curb, and knock down a tree in the median. Letourneau
also introduced into evidence photographs depicting the damage to
both parties vehicles.

ANALYSIS

I. ACCIDENT REPORT

On the first issue, Acuar argues that the circuit court
violated Code ? 46.2-379 by allowing the jury to hear
repeated references to Mills accident report. Acuar also
posits that the courts direction to the officer to refer to
his report to refresh his recollection increased the likelihood
that the jury placed undue weight on its contents even though the
report was not actually admitted into evidence.

In response, Letourneau points out that the first mention of
the accident report occurred when Mills stated, without
solicitation, that he did not "have a copy of the accident
report." Continuing, Letourneau stresses the fact that the
only time that his counsel used the phrase "accident
report" was when he handed the report to Mills so the
officer could use it to refresh his recollection.

Letourneau also contends that Mills references to the
accident report and its contents were merely cumulative of
Stanleys testimony and the photos of the vehicles, both of
which conclusively established the force of the impact between
the two vehicles. Also, Mills did not testify about any facts or
circumstances that were disputed. Thus, argues Letourneau, any
error by the circuit court on this issue was harmless. We do not
agree.

Code ? 46.2-379 provides, in pertinent part, that
"accident reports made by investigating officers
. . . shall not be used as evidence in any trial, civil
or criminal, arising out of any accident." As we have
previously stated, "[t]he rationale of the statute is that
the report, although routinely and sometimes hurriedly made,
. . . nevertheless carries with it the stamp of a
written and official document to which a jury could attach more
weight than it is properly due." Davis v. Colgin, 219
Va. 5, 7, 244 S.E.2d 750, 751 (1978). AccordCherry v.
D.S. Nash Constr. Co., 252 Va. 241, 246, 475 S.E.2d 794, 797
(1996); Galbraith v. Fleming, 245 Va. 173, 175, 427 S.E.2d
187, 188 (1993).

In Phillips v. Schools, 211 Va. 19, 175 S.E.2d 279
(1970), the plaintiffs attorney sought to cross-examine the
defendant about a prior statement by making specific reference to
an accident report. Although the plaintiff conceded that the
report itself could not have been introduced into evidence if the
defendant denied making the statement, the plaintiff nevertheless
asserted that he should be permitted to use the report to
cross-examine the defendant about a statement in the report.
However, this Court held that "to have permitted
plaintiffs counsel to make specific reference to the report
in the presence of the jury, and to read defendants
statement therein for the purpose of contradicting him, would
have in effect accomplished indirectly what [former] Code
? 46.1-407[[4]]
forbids to be done directly." Id. at 22-23, 175
S.E.2d at 281.

Similarly in Davis, the plaintiffs counsel
furnished the investigating police officer with a copy of the
officers accident report for the purpose of refreshing the
officers memory. The officer was then questioned about the
details of the accident. On cross-examination, the
defendants counsel attempted to ascertain how the officer
had refreshed his recollection regarding the accident and asked
the officer about the accident report. Davis, 219 Va. at
6, 244 S.E.2d at 750-51. Even though the report was not
introduced into evidence, this Court held that "no
reference" should have been made to the report by either
party or their counsel. Id. at 8, 244 S.E.2d at 751.

As in Davis and Phillips, the accident report
was not introduced into evidence in the present case. However,
the numerous references to it[5] during Mills testimony
by not only the officer but also the court and Letourneaus
attorney amounted to nothing less than an official stamp being
placed on the document used to refresh Mills recollection.
Thus, the jury could have placed more weight on Mills
testimony than it might otherwise have done. As we said in Phillips,
the references to the accident report "accomplished
indirectly what Code ? [46.2-379] forbids to be done
directly." 211 Va. at 22-23, 175 S.E.2d at 281. Therefore,
we conclude that the circuit court erred in allowing the repeated
references to the accident report.

We also do not believe that the error was harmless. Since
Acuar admitted liability, the only issue for the jury to
determine was the quantum of damages. Evidence of the details of
the collision and the severity of the impact between the two
vehicles was material and relevant to an assessment of the trauma
and injury that Letourneau sustained. SeeWallen v.
Allen, 231 Va. 289, 293-94, 343 S.E.2d 73, 76 (1986). Since
Stanleys testimony followed, and was in most respects
cumulative of, Mills testimony, the repeated interjection
of the accident report in front of the jury made it more
difficult for Acuars counsel to effectively test
Stanleys memory during cross-examination. In other words,
the "stamp of a written and official document," Davis,
219 Va. at 7, 244 S.E.2d at 751, that implicitly accompanies an
accident report enhanced not only Mills testimony but also
that of Stanley. Therefore, we cannot say that the numerous
references to the accident report were not prejudicial to Acuar.
Accordingly, we will remand this case to the circuit court for a
new trial.

II. MEDICAL EXPENSES WRITTEN OFF

We now address the question whether those portions of
Letourneaus medical bills that his health care providers
wrote off can be submitted to the jury. We decide this issue
because it will likely arise again in a new trial.[6]SeeShelby Ins. Co. v. Kozak, 255 Va. 411, 416, 497
S.E.2d 864, 868 (1998).

We begin with a discussion of the collateral source rule, the
applicability of which is central to this issue. The collateral
source rule is a long-standing principle in Virginia tort law and
has been applied in tort cases for more than a century.[7]SeeSchickling v.
Aspinall, 235 Va. 472, 475, 369 S.E.2d 172, 174 (1988); Johnson
v. Kellam, 162 Va. 757, 764-65, 175 S.E. 634, 636-37 (1934); Baltimore
& Ohio R.R. Co. v. Wightmans Admr, 70 Va. (29
Gratt.) 431, 446 (1877), revdonothergroundssubnom.Railroad Co. v. Koontz,
104 U.S. 5 (1881). The meaning of the collateral source rule and
its rationale are found in the following passages from several of
our prior cases:

The law seems quite well settled that damages, recoverable for
personal injuries inflicted through the negligence of another are
not to be reduced by reason of the fact that the injured party
had been partly compensated for his loss by insurance which he
has procured and for which he has paid. The reason for this rule
is that the defendant, who by his negligence, has injured
another, owes to such other compensation for the injuries he has
inflicted and the payment for those injuries from a collateral
source cannot relieve the defendant of his obligation.

Kellam, 162 Va. at 764, 175 S.E. at 636. AccordBurks
v. Webb, Admx, 199 Va. 296, 304, 99 S.E.2d 629, 636
(1957). Pursuant to the rule, "compensation or indemnity
received by a tort victim from a source collateral to the
tortfeasor may not be applied as a credit against the quantum of
damages the tortfeasor owes." Schickling, 235 Va. at
474, 369 S.E.2d at 174. A person who is negligent and injures
another "owes to the latter full compensation for the injury
inflicted[,] . . . and payment for such injury from a
collateral source in no way relieves the wrongdoer of [the]
obligation." Walthew v. Davis, Admr, 201 Va.
557, 563, 111 S.E.2d 784, 788 (1960) (citing Webb, 199 Va.
at 304, 99 S.E.2d at 636).

With regard to the issue concerning the medical expenses that
were written off, Acuar first points out that the purpose of
compensatory damages is to make a plaintiff whole. SeeF.B.C.
Stores, Inc. v. Duncan, 214 Va. 246, 251, 198 S.E.2d 595, 599
(1973). Relying on Sykes v. Brown, 156 Va. 881, 159 S.E.
202 (1931), Acuar argues that a plaintiff may recover medical
expenses only when the plaintiff "is liable for the debt
incurred." Id. at 887, 159 S.E. at 204. Continuing,
she asserts that, based on this Courts decision in State
Farm Mut. Auto. Ins. Co. v. Bowers, 255 Va. 581, 500 S.E.2d
212 (1998), the portions of medical bills that are written off by
health care providers are not "incurred" expenses
because a plaintiff is never legally obligated to pay those
amounts. Thus, Acuar contends that the collateral source rule is
not applicable to the present case because Letourneau is not, and
never will be, legally obligated to pay those portions of his
medical bills that were written off, nor were those amounts paid
on his behalf. According to Acuar, the amounts written off by
health care providers are not benefits derived from a collateral
source, and to allow Letourneau to recover such amounts as
damages in this tort action would create a double recovery or
windfall in his favor.

In opposition, Letourneau asserts that the collateral source
rule does apply and that therefore Acuar cannot reduce the amount
of damages for which she is liable by deducting the amounts
written off by Letourneaus health care providers.
Letourneau points out that his health care providers wrote off
certain portions of the medical expenses because of agreements
between them and his health insurance carrier, and that such
agreements are part of the benefits that Letourneau obtained in
exchange for the consideration, or premium, that he paid for his
health insurance coverage. Letourneau maintains that, if
Acuars position were adopted, she would derive a benefit
from Letourneaus health insurance without having paid any
consideration for such a benefit, thereby creating a windfall for
Acuar. However, based on this Courts decision in Schickling,
Letourneau asserts that the law favors a windfall for the tort
victim rather than the wrongdoer.

In deciding this issue, we first note that our decision in Bowers
is not dispositive. That case involved a contractual dispute
between an insured and his automobile liability insurance carrier
regarding coverage under the medical payments provision of the
policy at issue. Bowers, 255 Va. at 583-84, 500 S.E.2d at
212-13. Under the terms of that provision, the insurance carrier
agreed to pay "on behalf of each injured person, medical
expense benefits as a result of bodily injury caused by
accident." Id. at 583, 500 S.E.2d at 212. The policy
defined medical expense as "all reasonable and necessary
expenses for medical . . . services . . .
incurred . . . ." Id. Accordingly, to
answer the coverage question, we focused on the meaning of the
term "incurred," as defined by this Court in Virginia
Farm Bureau Mut. Ins. Co. v. Hodges, 238 Va. 692, 385 S.E.2d
612 (1989). In Hodges, we said that "[a]n expense can
only be incurred . . . when one has paid it
or become legally obligated to pay it." Id. at 696,
285 S.E.2d at 614. Thus, we concluded in Bowers that
"the medical expenses Bowers [had] incurred were
the amounts that the health-care providers accepted as full
payment for their services rendered to him" and did not
include the amounts written off by such providers.[8]Bowers,
255 Va. at 585-86, 500 S.E.2d at 214.

Even though that case, like the present one, involved medical
expenses that health care providers had written off, we were
construing the specific terms of an insurance contract in Bowers.
Thus, neither the tort policy of this Commonwealth nor the
collateral source rule was implicated. By contrast, in the
instant case, we are reviewing a tort claim, not a contractual
one, by an injured party against a wrongdoer.

We also point out that Hodges likewise involved the
interpretation of a medical payments provision. Hodges,
238 Va. at 693, 385 S.E.2d at 612. In that case, the plaintiff
sought to recover the cost of surgery under the medical payments
provision of her automobile insurance policy even though she had
not yet undergone the surgery and had not entered into a contract
with the doctor to perform the surgery on some future date. Id.
at 694-95, 385 S.E.2d at 613. This Court concluded that the
plaintiff had not "incurred" that surgical expense
within one year from the date of the accident as required by the
terms of the insurance policy. Id. at 696, 385 S.E.2d at
614.

By way of contrast, if the plaintiff in Hodges had
brought a tort action against the negligent driver who caused her
injuries, such as the present case filed by Letourneau, she
undoubtedly would have been allowed to recover the cost of future
medical expenses as an element of damages. SeeHailes
v. Gonzales, 207 Va. 612, 614, 151 S.E.2d 388, 390 (1966)
(award for future medical expenses is appropriate when evidence
supports such an award). The question whether such future
expenses had been "incurred" would not have been an
issue.

Likewise, this Courts decision in Sykes does not
provide controlling precedent for purposes of the issue before
us. There, the plaintiff sought damages for personal injuries
sustained when she was struck by an automobile. Testimony from a
doctor associated with the hospital where the plaintiff had
received treatment established the approximate amount of her
hospital bill and the balance due on the bill. Sykes, 156
Va. at 886, 159 S.E. at 204. One of the errors assigned was the
trial courts refusal to instruct the jury that it could not
consider "any expenses incurred for hospital care, nursing,
medical or surgical treatment."[9]Id. at 886-87, 159 S.E. at 204. In support of the
instruction, the defendant argued that the evidence failed to
show that the plaintiff had paid any part of her medical
expenses. Id. at 887, 159 S.E. at 204. In holding that the
instruction was properly refused because the record established
that the plaintiff owed another doctor for services rendered as a
result of the accident, this Court stated that "[p]ayment of
the expense of treatment is not essential to a recovery. If
plaintiff is liable for the debt incurred, that is all that is
necessary." Id.

The decision in Sykes focused on whether it was
necessary for the plaintiff to have paid her medical expenses
before she could claim them as part of her damages. The
application of the collateral source rule was not at issue. Thus,
we are not persuaded by Acuars argument, based on the
previously quoted language from Sykes and the definition
of the term "incurred" used in Bowers, that the
collateral source rule does not apply to the present case because
Letourneau did not "incur" the medical expenses that
his health care providers wrote off. That argument overlooks the
fundamental purpose of the rule, explained above, to prevent a
tortfeasor from deriving any benefit from compensation or
indemnity that an injured party has received from a collateral
source. In other words, the focal point of the collateral source
rule is not whether an injured party has "incurred"
certain medical expenses. Rather, it is whether a tort victim has
received benefits from a collateral source that cannot be used to
reduce the amount of damages owed by a tortfeasor.

Letourneau is entitled to seek full compensation from Acuar. SeeWalthew, 201 Va. at 563, 111 S.E.2d at 788. Based on the
cases cited above dealing with the collateral source rule, we
conclude that Acuar cannot deduct from that full compensation any
part of the benefits Letourneau received from his contractual
arrangement with his health insurance carrier, whether those
benefits took the form of medical expense payments or amounts
written off because of agreements between his health insurance
carrier and his health care providers. Those amounts written off
are as much of a benefit for which Letourneau paid consideration
as are the actual cash payments made by his health insurance
carrier to the health care providers. The portions of medical
expenses that health care providers write off constitute
"compensation or indemnity received by a tort victim from a
source collateral to the tortfeasor . . . ." Schickling,
235 Va. at 474, 369 S.E.2d at 174.

This conclusion is consistent with the purpose of compensatory
damages, which is to make a tort victim whole. However, the
injured party should be made whole by the tortfeasor, not by a
combination of compensation from the tortfeasor and collateral
sources. The wrongdoer cannot reap the benefit of a contract for
which the wrongdoer paid no compensation. Baltimore & Ohio
R.R. Co., 70 Va. (29 Gratt.) at 446. The extent of
Acuars liability to Letourneau cannot be "measured by
deducting financial benefits received by [Letourneau] from
collateral sources." Owen v. Dixon, 162 Va. 601, 608,
175 S.E. 41, 43 (1934). In other words, "it is the
tortfeasors responsibility to compensate for all harm that
he [or she] causes, not confined to the net loss that the injured
party receives." Restatement (Second) of Torts ? 920A
cmt. b (1977).

To the extent that such a result provides a windfall to the
injured party, we have previously recognized that consequence and
concluded that the victim of the wrong rather than the wrongdoer
should receive the windfall. Schickling, 235 Va. at 475,
369 S.E.2d at 174. We explain the rationale for that result by
repeating the following explanation of the collateral source
rule:

The collateral source rule is designed to strike a balance
between two competing principles of tort law: (1) a plaintiff is
entitled to compensation sufficient to make him whole, but no
more; and (2) a defendant is liable for all damages that
proximately result from his wrong. A plaintiff who receives a
double recovery for a single tort enjoys a windfall; a defendant
who escapes, in whole or in part, liability for his wrong enjoys
a windfall. Because the law must sanction one windfall and deny
the other, it favors the victim of the wrong rather than the
wrongdoer.

Id. at 474-75, 369 S.E.2d at 174.

For these reasons, we hold that Letourneau may present
evidence at the new trial of the full amount of his reasonable
medical expenses without any reduction for the amounts written
off by his health care providers.

Reversed and remanded.

FOOTNOTES:

[1]Pursuant to agreements between
health care providers and health insurance carriers, health care
providers routinely deduct certain amounts from the total costs
of medical treatment. Those are the amounts "written
off."

[2]Letourneaus medical bills
were in excess of $41,000. However, after deducting the amounts
written off by the health care providers, his medical bills
totaled $13,618.51. Letourneau introduced bills totaling
$40,831.03 into evidence during the trial. Acuar admitted the
reasonableness and authenticity of Letourneaus medical
bills.

[3]The circuit court had
previously entered a scheduling order that provided, in pertinent
part, that "[m]otions in limine shall be scheduled for
hearing before the trial date."

[4]Former Code ? 46.1-407
provided that accident reports were to be confidential, while
former Code ?? 46.1-408 and 409, interalia,
barred the use of accident reports as evidence in any trial.
Those portions of former Code ?? 46.1-408 and 409
are now codified at Code ? 46.2-379.

[5]The accident report was also
referred to by the terms "diagram" and
"report."

[6]We will not address the
question whether the circuit court abused its discretion in
ruling that Acuars motion to exclude the portions of the
medical bills written off was not timely under the courts
scheduling order. In light of our determination that this case
will be remanded for a new trial, that question is moot.

[8]We also note that when the
General Assembly defined the term "incurred" in Code
? 38.2-2201(A)(3), it did so only in the context of
provisions for payment of medical expenses in automobile
liability insurance policies.

[9]Because the doctor who
testified could not state the correct amount due the hospital but
only approximated the expenses incurred, and also could not state
whether the bill had been paid by the plaintiff or whether she
was primarily liable for the bill, the defendant also assigned
error to the trial courts failure to sustain an objection
to the doctors testimony. This Court concluded that the
testimony should have been excluded. Sykes, 156 Va. at
886, 159 S.E. at 204.